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Company Presentation May 2019
Company PresentationMay 2019
This presentation may contain forward-looking, work-in-progress statements based on current assumptions and forecasts made byADL Bionatur Solutions, S.A. (“ADL” or the “Company”) or the Company’s management. Various known and unknown risks,uncertainties and other factors could lead to material differences between the actual future results, financial situation, developmentor performance of the Company and the estimates given here.
RELEVANT ASPECTS REGARDING PREVIOUS INFORMATION PUBLISHED
This document contains information and forecasting statements, which may be related to plans, objectives, estimates, intentions andexpectations, among others. This information is typically identified by words such as "anticipating," "waiting," "estimating," "prognosis,""objective," "intent," "plan," "will," "may," "should," "could," and similar expressions. The specific forecasting information provided in thisdocument includes, but is not limited to, statements regarding the future operating of the Company, its financial results, its research anddevelopment activities, and its capital expenditure plans.
Due to their nature, this information and forecasting statements involve risks and uncertainties that could lead to the actual resultsdiffering from those expected. We believe the assumptions on which these forecasts are based to be reasonable, but we realise thatthese assumptions about future events, many of which are beyond our control, may differ from the final outcome.
ON FUTURE FORECASTS AND DEVELOPMENTS
The ADL Bionatur Solutions Group informs its shareholders that these developments are subject to significant risks and uncertaintiesincluding, but not limited to, the general conditions of industry and competition; general economic factors including interest andexchange rate fluctuations; the impact of international law on industry; global trends towards the containment of spending on animalhealth; technological advances, new products and new competitor patents; challenges inherent to biological products underdevelopment; manufacturing problems or delays; the instability of the international economic situation or any instability in particular; orexposure to litigation by third parties, among others. Thus, there can be no assurance that products under development will receive thenecessary marketing approval or that they will be a commercial success, where applicable.
Disclaimer
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2019 Total Revenues expected to be €50m-€55m up from €25.2m in 2018
Continued attractive growth expected to be driven by high demand for fermentation manufacturing 2
Fermentation manufacturing attracts long-term, contracted customer base of established partnersc. 65% of forecasted 5-year business plan already contracted or highly predictable4
1Market Leading Fermentation Company focused on the Health, Beauty and Wellness IndustriesLargest fermentation production plant in Southern Europe (based in Léon, Spain) supported by substantial fermentation
expertise
3 2019 Results expected to show strong profitEBITDA positive performance since October 2018 (targeting >15% EBITDA margins for 2019 and >30% over the long term)
Attractive proprietary pipeline of innovative productsLeveraging our expertise, we are developing new high-value fermentation processes to improve the manufacture of known,
commercially attractive molecules6
5High barriers to entry for value-added fermentation manufacturingSignificant capex, know-how and capabilities required to become a commercial manufacturer of scale
Smaller R&D service business units adding to business know-howThese business units provide additional know-how which complement our larger Fermentation and API/CMO businesses7
3
Executive Summary
2018 Reverse Merger of ADL and Bionaturis has created a market-leading expert in fermentation manufacturing
for the the Health, Beauty and Wellness industries
Attractive pipeline of innovative high-value fermentation processes being
developed to provide improved production of:
• Cannabinoids
• New generation of generic antibiotics (recently or about to be “off patent”)
• Microbiota-based products focused on specific markets
• Products derived from these improved processes will be supplied directly
to players in the Health, Beauty and Wellness Industries
Market-leading contract manufacturer offering fermentation of Advanced
Intermediates, Fine Ingredients, Life Science Chemicals and Nutritional
Products
• Customers are “medium to large” companies from either Europe or the USA
• Contracts are typically multi-year relying on ADL’s market-leading fermentation
expertise
• CMO/API provides a growing, profitable revenue base to support the group’s
expected evolution towards manufacture of higher value proprietary products
CMO/API
Proprietary
Development of
Innovative
Products
Key
Growth Engines
Near term
Medium to
long term
ADL Bionatur Solutions: Building a Leading Fermentation Company
4
1954 – 1980s
Antibióticos was established in
Spain. Penicillin G production
begins.
By the 1980’s, ADL became one of
the most important Penicillin
manufacturers in Europe.
2015
Facilities are inspected
and approved by AEMPS
(Spanish Agency).
ADL obtains FMA by PMDA
(Japan) and GMP approval
by KFDA (Korea).
2016Facilities are inspected
and approved by FDA
(USA).
2017
Reverse Merger with
Bionaturis. Listed on the
Alternative Equity
Market (MAB).
2018
€50-55m Sales
Target underpinned by
multiple long term contracts
with international leading
companies
2019
Our Journey
5
The plant is acquired by
BTC. The new Antibióticos
de León is born.
2014
Revenue Mix between Business Units
89%
11%
2019ECMO/API
CRO/proprietary
technologies and molecules
Powerful proprietary portfolio of 10 patent
families8 animal health products on market and 6 in development
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Manufacturing plant in León, Spain
2,400m3 Fermentation Production Capacity, LeónFDA (US), AEMPS (Spain), EDQM (EU), PMDA (Japan)
& KFDA (Korea) approved
Research facilities in Barcelona, Jerez and San
Sebastian, SpainR&D services with scale-up and regulatory affairs
experience
ADL Bionatur Snapshot
Over 330 employees worldwideAbout 30% in R&D
0,04,7 6,1
12.8
25.2
FY14 FY15 FY16 FY17 FY18 FY19E
50-55
7
CAGR 15-19:
>90%
Total Revenue (€m) (Bionatur included from ’18 onwards)
Overview of Business Units and Geographic Presence
Léon, Spain
Fermentation contract
manufacturing of Advanced
Intermediates, Fine
Ingredients, Life Science
Chemicals, Nutritional Products
Jerez, Spain
Products obtained through the
fermentation process for human
and animal health
Barcelona, Spain
Biological purification technologies
for broad application across
industrial sectors (incl. life sciences,
biopharma, industrial and animal
health)
San Sebastian, Spain
CRO providing zebrafish animal
models to test product efficacy
and toxicity
SPAIN USA
Cambridge, MA
Sales and scientific
hub for ADL Bionatur
Group
Blue-Chip Customer Base (Selected Partners)
ADL Bionatur Snapshot (Continued)
Who we are
ADL BioPharma is the main business unit
of the Group and is primarily focused on
CMO/CDMO for leading partners
We are a biopharma company
specialized in the development and
industrialization of products based on
fermentation processes for third parties
(“CDMO”) and for our own portfolio.
On top of this, we have a niche unit to
produce Active Pharmaceutical
Ingredients (“APIs”) derived from penicillin
We have one of the largest
fermentation production facilities in
Southern Europe
What we do
We offer our customers:
Significant industrial capacity and
know-how for the manufacture of any
product obtained through a fermentation
process
Contract development services
A wide range of active ingredients in
compliance with FDA and EMEA
regulations
Experienced staff with in-depth
knowledge of fermentation techniques
and scale-up/production development
Deep knowledge of regulatory affairs
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We Are A Leading Fermentation Player
Sterile Plant:
• Drying filter 1: up to 40 mT
capacity.
• Drying filter 2: up to 20 mT
capacity.
Semi-Synthetic Plant:
• 1,000 mT capacity (measure
taken on Amoxicillin Trihydrate)
High Potency Building:
• 50 m3 minimum capacity for
fermentation of high potency
active substances with
oncological uses
Manufacturing of APIs
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• Biological laboratories: 2-5l fermenters,
incubation chambers, master cell bank,
two strain monitoring robots, etc.
• Industrial fermentation plants with a
capacity of 2,400 m3
• Over 170 m3 of vegetative fermentation
chamber capacity
• More than 250 m3 of auxiliary tanks and
continuous sterilizers
• More than 25 distillation columns
• Fermentation Pilot Plant: Renovation
and start-up of a new pilot plant of high
capacity and versatility (2018). The total
capacity of the pilot plant reaches
around 10,000l divided in 1 fermenter of
2,000l, 6 units of 1,000l (per unit), 2
fermenters of 500l and 2 of 100l
Development and production of CMO
State-of-the-Art Facilities with Capacity to Support Future Growth
CMO
Long-term contracts with loyal customers to manufacture
high-value biologically active materials for third parties for
end-markets such as food additives, beauty products,
fragrances and fine chemicals
68% revenues in 2018
Products include: beta-carotene, flucosyl-lactose, patchouli,
farnese, Omega 3, probiotics, postbiotics and others
Main drivers:
Industrial Biotechnology estimated to growth from €28bn in
2013 to €50bn in 2030
High speed development in genetic modification
technologies has led to increasing opportunities for
fermentation
Fermentation processes are cheaper, faster and more
environmentally friendly than chemical processes or
geological extraction
Manufacturing and commercialization of active pharmaceutical
ingredients (“APIs”) based on B-lactam’s antibiotics
ADL’s capacity to produce sterile antibiotics (Sterile) is 60 tons
per year and oral antibiotics (SSP: Semi-Synthetic Penicillin –
not sterile) is over 1,000 tons per year
25% revenues in 2018
Products: penicillin derivatives
Main drivers:
Proprietary beta lactam and immunosuppressant API
technology
CMO services for oncology APIs under negotiation
In-depth experience on registration of Pharma products for
human health
Commercial strategy based on sterile niche products
API
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Sterile SSPFermentation
Over the Medium Term ADL Revenue Will Be Driven By CMO/API
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We Will Drive Future Growth Through Our Own Targeted Process
R&DBased on our proprietary R & D programs, we are developing products that can be derived
via fermentation, manufactured in our facilities and then licensed to commercial partners for
marketing
We target known and approved off-patent high-value products in growing markets where
fermentation manufacturing can offer huge advantages in terms of price, purity, availability
and environmental impact.
We are investing to develop new fermentation processes for the following products:
- Cannabinoids: to find a fermentation process to manufacture them is one of the goals of the
pharma industry worldwide.
- Collagen for human use (and bio equivalents): to satisfy increasing market demands for an
animal free source
- Production of semi-synthetic antibiotics: focus on those going off-patent where we can be first
generic API to market
Within our R&D programmes, we are also developing new microbiota modulators
(probiotics, post-biotics and prebiotics) with a personalized approach (innovative mixture
of approved products depending on different consumers features and health needs).
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Industrial Tailwinds Provide Attractive Outlook
The Group Also Offers Niche R&D Services to Industry
Following the merger with Bioanturis, the Group includes B2B businesses such as
Biobide and ZIP which work with multinational laboratories and national champions from
pharma, biotech, chemistry, cosmetics and nutrition sectors
Through Bionaturis, we offer in-depth knowledge of the animal and human health
markets and their needs (currently focussed in animal vaccines developments and
microbiota modulators)
We employ an experienced R&D team including 40 direct workers (45% PhDs)
Our Proprietary Technological platforms include:
- Zebrafish platforms for CROs (toxicity and efficacy trials in animal models)
- Flylife (Overcome the worldwide shortage in the supply of baculovirus expressed
antigens)
- Splitera (Universal high-yield purification of biological products)
- Zera Vaccines (licensed for leishmaniosis, circo virus, PIRS)
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Reverse acquisition of ADL Biopharma and Bionaturis completed
Listing on the Spanish Mercado Alternativo Bursátil (MAB, Ticker: ADL)
Integration across several initiatives advancedResearch, development and manufacturing projects launched across company divisions
Government support through Retos program for R&D
Cannabinoids R&D project to develop our own CBD and THC fermentation process
Microbiota personalised services and products (1st products on Spanish market with NC Salud, testing)
Long-term manufacturing contracts signed with US- and EU-based partners: Jan 2018: Started 6-year contract with major client with total revenue of €142m
Feb 2018: 2-year CMO fermentation contract with Amyris for €5m/year
Jun 2018: Amyris contract extended for additional 15 months and additional €6.2m
Aug 2018: CMO fermentation contract with Fermentalg for 3 to 5 years
Dec 2018: Amyris contract extended for a third fermenter (more than €20m per year)
Successful capital increase raising €12m with institutional investors in SpainTo finance ongoing innovations and upgrades at the production facility in León
Further funds raised through Spanish regional government loan to finance upgrades in León
ADL coverage and in the marketsADL at the MSCI microcaps Spain Index, MaB15
Research Coverage broadened (Edison, CheckPoint, Sabadell & GVC Gaesco)
Key Events 2018
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New international
customers
Continuous
improvement of
facilities
Longer term
contracts
€25m
revenues compared
to €13m (2017)
Highlights of 2018 Financial Performance
Substantial
revenue growth
continued
1 EBITDA
significantly
improved
2 Cash €3m at the
end of December
2018
3
Improved
utilization
In-house
production of
Bionaturis
products
Gross margin up
50% at contracted
CMO
First EBITDA
monthly positive in
October 2018
Improved margins
Successful capital
increase of €12m
Funds raised
through
government loans
Expected to be
operational cash
positive in 2019
15
~50% organic revenue
growth through
forecast period
• c. €50m-€55m in expected
revenue in 2019 up from
€25.2m in 2018
• c. 65% of forecasted
business plan underpinned
by existing contracts with
international players
• Additional growth from
pipeline of proprietary
products
Full capacity
committed by end 2019
• Significant increase in
capacity utilization achieved
• Additional capacity to
support proprietary pipeline
as well as future customer
growth
30% EBITDA margin target
• 2019 expected to show strong profitability
• EBITDA positive performance since
October 2018 (targeting >15% EBITDA
margins for 2019 and >30% over the long
term)
We Will Continue to Pursue Profitable Growth
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MSC Economics
Over 20 years experience managing
public and private companies in the
pharma and biotech sectors in the
European Union
Pilar de la Huerta
GROUP CEO
CEO OF THE INDUSTRIAL DIV
PhD in Sciences and Chemistry
Over 15 years of experience in the
biotech sector, leading up to four
financial rounds, one IPO at MAB and
three M&A deals. Bionaturis founder
Victor Infante
GROUP BD DIRECTOR
CEO OF THE ANIMAL HEALTH DIV
Degree in Business and Law
Over 15 years of experience in
corporate, financial and integral
business management areas
Juan Andrés Corrochano
CFO
Engineer
Over 20 years of experience in
international pharma and fermentation
companies as plant director.
Javier Uria
COO
Led by an Experienced Management Team
17*Financials are as of 14th May, 2019 unless stated otherwise
Broker Target Price
Banco Sabadell €2.50 - €4.11
ESN (European Securities Network LLP) €3.10
Edison Research €2.37
Check Point €3.20
**Shareholder Structure are as of 18th March, 2019
Share Price and Capital Structure Overview
Ticker “ADL.MS”
Shares outstanding: 39,389,067
Current market cap*: >€90m
Net debt at 31 Dec 2018: €42.9m
Basic Information
Analyst Coverage
Shareholder Structure**
Black Toro Capital73,2%
Victor Infante5,1%
Free Float21.7%
Contact
ADL Bionatur Solutions
Pilar de la Huerta, CEO
Av. del Desarrollo Tecnológico, 11
11591 Jerez de la Frontera, Cádiz
Tel.: +34 987895801
Email: [email protected]
www.adlbionatur.com
